Lehigh Valley housing market gains momentum

Pending home sales in Lehigh Valley hit highest level in two years in March, and prices are rising.

April 17, 2012|By Spencer Soper, Of The Morning Call

Lehigh Valley real estate agent Fady Salloum is witnessing the local real estate market's improvement firsthand. The Coldwell Banker Heritage agent sold 30 homes in the first three months of 2012, more than double the 12 he sold in the same period a year earlier.

"If you price your property realistically, you will get offers on it," he said. "Inventory is moving quickly."

His experience highlights what could be a dramatic shift in the Lehigh Valley housing market, which has been searching for bottom beneath the weight of high joblessness and foreclosures. As the job market has slowly improved, so has the housing market.

And sales activity in March gave real estate professionals good reason to expect the momentum to continue.

Pending Lehigh Valley home sales hit their highest level in two years in March and prices increased, according to the Prudential Patt, White Real Estate HomExpert Market Report.

Pending home sales — homes that are under contract but yet to close — are an indicator of future sales. There were 714 pending home sales in March, up nearly 50 percent from a year earlier and its highest level since April 2010.

A total of 416 homes sold in Lehigh and Northampton counties in March, up 5.9 percent from the same month a year ago. The median home sale price in March was $157,000, up 8.3 percent from February and up 1.4 percent from a year ago.

The report is encouraging news for real estate professionals, who worried that an uptick in sales over the winter represented an early spring selling season due to warm weather. The high number of pending sales in March indicates sales will likely continue to grow.

A weak job market and glut of foreclosures bogged down the Valley housing market in 2011. Fewer than 5,000 homes sold last year, the lowest number of sales in at least 11 years. But the year finished better than it began.

March was the Valley's ninth consecutive month of year-to-year sales gains. Prices, meanwhile, have gyrated in recent months.

Foreclosures continue to be a head wind for the housing market. From January to March, there were 896 foreclosure filings in the Lehigh Valley region, up 8.5 percent from the previous quarter, according to RealtyTrac, which monitors foreclosures nationally.

The Valley region has recovered more than half of the jobs it lost during the Great Recession. Housing is one of the last things to improve fafter a recession, with buyers reluctant to make big purchases in a shaky job market.

Economists expect the economy to continue its slow recovery this year, with rising fuel prices posing the biggest threat.

Bargain-hunters continue to dominate the local housing market.

About 45 percent of homes sold in March cost $150,000 or less, according to the Lehigh Valley Association of Realtors. In February, more than half of homes sold were in that price range.

Salloum said most of his clients are either first-time buyers or empty-nesters looking to downsize.

"They want to sell their big house and move into something smaller that's cheaper," he said.